Towards a comprehensive understanding of performance at firm-level
Chacon Fiallo, Oswaldo Alberto
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In everyday life, the notion of performance is used to describe indistinctly both the behavior and degree of achievement attained by some object or subject in a given task. For example, an athlete in some competition; an artist or actor in a play; a student or his teacher in certain course. In the business context, one can state, "The company is innovative"; "The company was profitable"; "The product is sustainable"; or “The company is socially responsible" when, through a wide variety of indicators, the observer identifies certain attributes in firm’s behavior, or his grade of achievement. Therefore, defining and measuring firm’s performance is a relevant practice in businesses, also considering that companies need to constantly assess their operation, in order to find better ways of running businesses; compete in the industry, and foremost, to demonstrate their stakeholders that both their processes and products are honoring the stated purposes or expectations. However, as it will be explained later, The State-of-the-Art review reveals that performance’s definition is quite ambiguous. Thus, performance has been conceptually linked to success, profitability, and more recently, to competitiveness or sustainability. In addition, it is remarkable that in management’ theory and practice, performance tends to be defined as performance measurement or performance management system (Bititci et al, 2018; Smith and Bitici, 2017). In other words, performance as a concept suffers from both conceptualization (how it is 10 defined) and operationalization (how it can be measured) problems. Technically, performance is suffering a lack of epistemological delimitation (Bacharach, 1989), but theorists and practitioners may have solved this issue by taking the concept for granted. Therefore, the aim of this conceptual work is to propose a comprehensive definition of firm performance. This is achieved through a mixed research methods, quantitative and qualitative, mainly exploratory ones, to nurture the definition of performance of the different approaches in theory and practice, appropriately contrasted and validated. Then, as a conceptual synthesis, a model is presented where multilevel and multidimensional features of performance -at firm level- are supported. The proposed model, main empirical contribution, might be useful to develop interventions in business, such as: diagnoses; formulation of improvement plans; case studies; rankings, among other academic and managerial applications. Furthermore, This document explains the importance and relevance of performance for management, and substantiates in the search for value, the strategic and organizational processes that organizations execute to satisfy both their own and stakeholders' expectations, but, beyond that, to pursue that the value gained may transcend to the social sphere. In this way, it is an invitation to work into ensure that the purposes of organizations exceed economic profit, recognition, or reputation, and become more aligned entities with more equitable, fair, and sustainable organizational schemes: a new approach to business performance.